16 Nov 2012 17:32
INTERIM MANAGEMENT STATEMENT
Ticker: (Bloomberg) INM.ID/INM.LN and (Reuters) INME.I/INME.L
Dublin/London, 16 November 2012: Independent News & Media PLC ('INM' or the 'Group') today issued an Interim Management Statement ('IMS') which provides an update on INM's trading performance for the year-to-date (45 weeks to 9 November 2012), and in particular for the period since 1 July 2012.
PERFORMANCE REVIEW
The year-on-year performance, in constant currency terms, for the 45 weeks to 9 November 2012 is as follows:
·; Total Group Revenues declined by 3.0% (-4.1% in euro);
·; Total Advertising Revenues declined by 5.4% (-7.2% in euro);
·; Total Circulation Revenues declined by 3.1% (-3.9% in euro); and
·; Operating Cost reduction of 0.7% (-1.5% in euro).
Trading conditions since the announcement of the Group's 2012 First Half Results on 31 August have remained challenging as had been anticipated, reflecting the difficult economic backdrop still prevailing in the Island of Ireland and South Africa. Against this continued backdrop, and the Group's significant level of debt, the need for substantial and urgent restructuring is evident.
In Ireland, high unemployment, a challenged banking sector and concern surrounding a further difficult budget in December 2012 continue to impact on consumer sentiment and spending. In South Africa, consumer confidence remains subdued, resulting in a business environment that continues to be challenging.
In these economic conditions, advertising remains erratic and there has been a further deterioration in trading conditions in the period since 1 July 2012. INM's year-to-date advertising revenue is currently 5.4% behind last year (compared to 4.1% behind in H1 2012), while Group circulation revenue is currently 3.1% behind last year (compared to 1.9% behind in H1 2012).
INM's focus on achieving continued cost savings has helped to mitigate some of the revenue decline in the period, with total Group costs down 0.7% on the same period last year, despite significant general inflationary pressures in South Africa of in excess of 7%. Whereas some positive progress has been achieved in reducing INM's cost base in the period since 1 July, the full year sustainable benefits will not be reflected until 2013. Selected initiatives include:
·; INM's head office relocation and associated headcount reductions;
·; Restructuring programmes at the Belfast Telegraph and Sunday World; and
·; A recently agreed restructuring at its Citywest Print Plant in Ireland.
Notwithstanding recent momentum, a significant and permanent realignment of INM's cost base is now critical to INM's future success.
- OUTLOOK-
Trading conditions in the Island of Ireland and South Africa remain challenging. Advertising remains erratic and visibility is poor. Despite unprecedented operating conditions, and an ever-competitive media landscape, the Group's franchise remains relevant and resilient. INM has a strong portfolio of market-leading and profitable titles and a growing digital revenue stream. INM has a well invested and increasingly efficient asset base, with no significant medium-term capital expenditure requirements.
- DELEVERAGING -
As outlined in the Group's First Half Results, INM also continues to engage in constructive discussions with its lenders, with a view to refinancing its bank debt well in advance of its maturity in May 2014, and to enable the substantial and urgent restructuring required.
In relation to South Africa, as highlighted in the First Half Results, INM has appointed Investec and Hawkpoint to review its options in relation to its South Africa business. INM has been encouraged by the degree of interest shown by a number of parties in this business as it ascertains whether a disposal is deliverable on acceptable terms in the best interests of the Company.
- PENSION -
The Group's Republic of Ireland defined benefit pension schemes had a deficit at 30 June 2012 of €156.5m. The Group remains focused on providing certainty to those contributing to the various schemes and to securing a reasonable pension expectation for all participants within the timeline and parameters as set out by the Irish Pensions Board.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some statements in this announcement are forward-looking. They represent our expectations for our business and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and projections about future events. We believe that our expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond our control, our actual results or performance may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements speak only as of the date of this document and no obligation is undertaken, save as required by law or by the Listing Rules of the Irish Stock Exchange and/or the UK Listing Authority, to reflect new information, future events or otherwise.
- ENDS -
For further information, contact:
Pat Walsh Murray Consultants +353 1 498 0300 (office) +353 87 226 9345 (mobile) pwalsh@murrayconsult.ie | Vincent Crowley Group Chief Executive Independent News & Media PLC +353 1 466 3200 vincent.crowley@inmplc.com |
CORPORATE PROFILE
Independent News & Media PLC is a leading international newspaper and media group. Its main interests are located in the Republic of Ireland, Northern Ireland, and South Africa.
The Group has market-leading newspaper positions in the Republic of Ireland, Northern Ireland, and South Africa and has established a strong and growing digital presence, including market-leading digital positions in each of our main markets with more than 75 editorial, classified and transactional sites. INM is the largest newspaper contract printer and wholesale newspaper distributor on the island of Ireland.
In Australasia, the Group has a 29.0% investment in APN News & Media Limited - which is quoted on the ASX (Sydney). APN is the largest newspaper publisher in New Zealand and leading regional publisher in Australia. It is also Australasia's largest radio operator (50% owned) with over 140 stations and owns 50% of Australasia's largest outdoor advertising operator. APN also has a leading outdoor advertising position in Hong Kong.
From its newspaper origins in Ireland, INM has grown and evolved to become a geographically and media diverse group with market-leading brands. In aggregate, INM manages gross assets of €565 million, revenue of €558 million and employs approximately 2,800 people worldwide.